Debt review in South Africa

Staying in control of your financial situation is no easy feat where life and money are concerned. Most individuals will quite comfortably admit that they “have no idea how they got here”.

With a home loan, a car loans, various credit cards and many other personal loans debt can quickly overwhelm us and lead us into a cycle of debt that is hard to get out of without professional intervention.

One minute everything’s going well, your budget is looking good, you are comfortable with the amount of disposable income you have, you see a new washing machine that you’ve had your eye on replacing what feels like forever now and so you go a little over budget “just this one time”.

Next thing, you look at your statement and you see a score of minuses blatantly glaring at you and each month nothing changes. While you’re trying your utmost to bring them down, you just can’t seem to get it right. Nothing you do in your life is helping to bring control back into your financial situation. If you haven’t guessed it already, it’s time to consult a professional. Debt Counselling is the next step to getting you back on track.

High interest debts like short-term loans and credit cards are the worst since they cost you the most and if you don't pay them on time you will be charged very high non-payment fees which will only make you fall deeper into debt.

While the saying “it’s never too late to get started” rings true in any situation, this one included, it’s still always best to reach out to someone as soon as possible. Your situation will just continue to creep towards dire and before you know it, you’ll be liable for surpassing this option and going straight into applying for a debt consolidation loan to bail you out of the hole you’re in.

When you’re in trouble, there are a multitude of solutions, but debt counselling see results

True, you can always consult that rich uncle in the family that seems to have his finances together. Perhaps he can give you advice on how to solve your problems, but how he is invested in seeing that you actually achieve the results you’re after or the daily habits of your spending. Is he going to check in to see how you’re fairing with your funds?

Debt counselling ensures you get yourself out of debt by helping you negotiate better rates on credit cards and loans and assisting you to get your creditors to stop harrasing you. There is no ulterior way to walk away from this option with the same, or more debt. Due to the expertise that these counsellors come with, you’ll be receiving first-hand, professional advice specifically on how to rid yourself of debt that you’ve accrued in your financial life.

Their primary roles in being an advisor to you, is to help negotiate better repayment terms with micro lenders - this is very critical if you have outstanding payday loans and small credits; create a new budget that doesn’t leave you penniless after expenses either and lastly; make sure that you identify the issues in how you accrued the debt in the first place, so as to avoid falling back into the same position in the future.

What are the benefits of going this route?

For starters, you can trust in the advice you are receiving, since it’s being received by experienced and professional registered debt counsellors.

They will take a look at your finances and assist in drawing up strategies to structure your budget in a way that you can afford to repay your creditors as well as cut unnecessary costs that you may not be aware you have been paying. As far as defaulting on your payments goes, that will become a thing of the past. You can forget about getting into any more debt either because you’ll need to follow their plan to the letter, which means cleaning up your finances once and for all.

Everything is tailored to meet your lifestyle and financial requirements, so you can rest assured that you won’t regret having chosen this route to solve your financial problems. You’ll regain control of your finances and become debt free!

What steps do I take to approach Debt counselling?

The first step is to find and choose a debt counsellor. There are a multitude ready and waiting for your call to assist you.

Generally, the first consultation is free of charge and they will simply listen and analyse your situation based on the information that you provide them with.

Setting up an appointment with them will be next and you should be prepared to have all your paperwork in order for the meeting so that you don’t have to go back and forth. Documents they will ask you for are recent payslips, agreements for any payday or instant loan agreements you may currently have, your bank and credit card statements to reflect all income and expenditure, as well as any letters that you may have received indicating poor debt repayments.

Through the furnishing of these documents, your debt counsellor will be able to engineer a detailed plan to eradicate your debt from performing a full analysis of your funds, your expenses and your financial situation overall. One that will leave no room for falling into the same debt trap in the future.

How do I go about choosing the best counsellor for my needs?

As earlier mentioned, there are a variety of counsellors at your disposal, but choosing the right one is fundamental to the health of your financial situation. The first step is to ensure that whoever you have elected to consult you is officially registered. Making use of referrals and recommendations from family and friends is a must. Chances are you won’t go wrong with someone if they come highly recommended by more than one reliable source.

If all else fails, just trust in your own research. You can compare them all online simply by reading up on their offers, their strategies and some key reviews on results that they have available on their website. Their website also portrays, whether they are big time or small fry when it comes to the firm itself. You can tell a lot of the success of a business on their website and how they come across.

Are they experienced? Do you like them? It sounds strange, but you wouldn’t be inclined to take advice from someone who rubs you up the wrong way! Be prepared for a number of questions being shot in your direction too. The more they ask, the more likely they’ll tailor something ideally suited to you. Also, if you've decided that a debt consolidation loan is the way to go you could apply from the comfort of your own home by completing an online loan application.

What strategies do they take that I wouldn’t have been able to on my own?

Let’s be fair, there are many ways to skin a cat. Not that anyone should ever be skinning a cat, just putting that out there! That said, there is no “one”, singular way to eradicate debt from your current financial situation and since there are many ways to go about it. It’s especially important that a professional, analyses your situation. If you were to start at the first strategy with no experience on whether it’s the right one, you could end up piling up more and more debt before reaching the one that actually works for you.

Do not be tempted to take out any loans for bad credit - even if you qulify for one. Taking out a bad credit loan or even a payday loan to pay off outstanding debt is never a good idea - it only serves to make you fall depper into debt.

Counsellors also understand how to negotiate with your creditors in order to get a better repayment in place for you, which you as an individual have no authority or experience to handle. Lenders will show some flexibility if a debt counsellor approaches them due to the relationship that they have, as well as the level of trust and the low-level risk that they come with.

As a final strategy – should your situation call for it, they might recommend a debt consolidation loan. If not, now is the time to feel the weight lifted off your shoulders and trust in the experts to guide you to your financial freedom and debt free life!